“Mean SOBs”

To many Austrians recessions (even depressions) “cleanse”! To Veetil and Wagner any targeting scheme, not only NGDPT, is a “mirage”:

Once a multitude of agents inhabit the economy, a uniform increase in the demand for money is surely a height of implausibility. There can be a decrease in an aggregate measure of velocity without that decrease being distributed equally across agents. Furthermore, a decrease in an aggregate measure can be accompanied by increases in velocity among a significant number of agents. To point to such non-uniformity of changes in the demand for money, moreover, raises questions regarding the source of that change, which leads in turn into questions of whether recessions might have socially useful purposes that stabilizing NGDP would impede.

NGDP stabilization is not a recipe for eliminating turbulence within societies. There is no such recipe, for the ingredients necessary to develop such a recipe are inconsistent with human nature and its perpetual effort to create new techniques and new enterprises in an environment where everyone is also fallible and mortal. Yet people have shown creative and resilient ability to deal with turbulence, provided only that political power and policy does not interfere with deployment of those abilities (Wagner 2013). Seeking to stabilize NGDP is to chase a mirage. A superior direction at which to aim a concern with turbulence is at the ways in which political activity retards the reasonable efforts of people to calm turbulence.

Maybe their appeal to “political activity” is akin to putting “the cart before the horse”!

Update: Bill Woolsey has a detailed critique of Veetil and Wagner.

HT: Becky Hargrove